Question

After the amount due on a sale of $23,900, terms 1/10, n/eom, is received from a customer within the discount period, the seller consents to the return of the entire shipment for a cash refund. The cost of the merchandise returned is $14,340. a. What is the amount of the refund owed to the customer?

Answer 1

Answer: $23,661

Explanation:

The term 1/10, n/eom means that a discount of 1% is applicable on sold goods if the payment is made within 10 days from the purchase of the good. If not then the buyer must pay the full figure by End of Month.

The customer paid within the discount period and so claimed the deposit. The amount that will be refunded to them is the value of the good less the discount price.

= 23,900 * ( 1 - 1%)

= 23,900 * 99%

= $23,661